WASHINGTON—Credit unions considering entering the condo lending market may want to review a new study from Fannie Mae.
As part of a recent Fannie Mae Mortgage Lender Sentiment Survey (MLSS) special topic analysis, Fannie Mae economists surveyed senior executives of mortgage lending institutions with a goal of better understanding their views on condo lending, and to help identify opportunities to streamline processes to better manage condo project risks.
The study examines how lenders’ views have changed since Fannie Mae’s previous condo survey in August 2020, the company said.
The Findings
Among the findings, according to Fannie Mae:
- Lenders cited incorporating condo project eligibility into automated underwriting systems as the most helpful idea in streamlining the condo underwriting process, followed by using GSEs’ or investors’ approval decision or list of approved condo projects
- Compared to the 2020 survey results, homeowners’ associations’ (HOA) questionnaires and lender project approval lists were cited much more frequently by lenders as the most useful data sources for condo underwriting
- Regarding top risk areas, lenders identified HOA financial instability and deferred maintenance as posing the highest risk – same as in August 2020. Inadequate insurance was the risk that increased the most over the past year
Read the full research report.